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What are the reasons why traders should not trade news?

Buy the rumor, sell the fact - buy the rumors to sell the truth is the main reason why forex Trader suffered heavy losses when trading news. The reason is that before every moment, the Big Boy is usually the "information" before the small traders like us. Big Boy knows how much the price will move before news arrives so they will trade according to their expectations of the market.

But the reality is often different, though Big Boy has insider information, but that's still just rumors about market intelligence. The reaction of the market will depend on how the crowd responds to the news. At this point, you will see the time when news prices appear to be very unpredictable, because the market is "thinking" what to do next. So, the news deal will be a gamble if you try to pursue it.

Technical analysis will help you find the footprint of the market

In short, you will see trendline lines, extremely effective MA lines to help you determine the next move direction of the price. Because no matter how random the market is, trader always repeats the old trading behavior such as buy bottom, sell peaks, buy chase or sell chase, etc. Although the market has developed, Trader more and more. More experience but you are assured that there will still be some new Trader made mistakes.

Mistake to think that more will be better

In Trading, more does not mean better. This is true when you try to analyze too much information while trading the market. Every day, the market always appears new news whether strong or weak news. So do not try to explain the direction of the market is due to some news has just appeared.

The most successful trader always has a trading system and they just follow the rules in their system. Of course, these transaction systems are not simply instructions that help you to enter orders under the conditions available such as programming an ea.

Conclusion with transaction according to news

You understand why should not trade by the news, as well as should not focus much on fundamental analysis. How will you apply this knowledge when trading? If you are a short-term trader (from H4), stop trade at strong news times (ie, remove red news on ForexFactory). If you are a long-term trader (trading from the daily frame or more), you have the right to ignore news and trade information.

Maybe this idea will be controversial and not enough convincing. But the essence of Trading is that there is no one thing that you believe or not. I will let you discuss more about this issue offline.

It’s risky so if we have experience then only we should go ahead with trading on news. Another thing is broker; if we are not with right broker then we shouldn’t be trading on news at all. I suffered a lot with Instaforex since with them; I lost a lot of profit due to their policy which never allowed anyone to make over 10% profits.

I will not say that trader should not trade news trading. I am going to say those who do not mastered news trading strategy should avoid new trading as news trading is quite complicated yet highly profitable. For news trading we must need some requirements from our broker. Like many brokers have re-quote and slippage problems while new hour that’s why we need to pick broker who has good execution system like my broker AAFX.

News trading works well but it is quite difficult to understand too many traders. No trader should do such a thing they don’t understand. There are many trading strategy in the market. All strategy is well in different place and in different situation. Trader should not stick with any one trading strategy. They should always use the trading strategy based on market demand. My broker TopFX24 helps me to work with different trading strategy.